Yes, but there are rules.
The IRS expects business to be conducted in a businesslike manner, and that includes charging interest on loans. You must charge at least the applicable federal minimum rate. For example, for a short term loan made in August, with interest calculated monthly, the applicable minimum rate is 4.84% (APR).
https://www.irs.gov/applicable-federal-rates
If you charge the minimum rate or more, and collect interest, you report the interest as taxable income on your tax return. (You can collect interest monthly, or yearly, or at the end of the loan, but you must charge at least the AFR and you must report it as income.)
Even if you don't charge interest, you must report and pay tax on the interest you could have charged if you charged the AFR. This is called imputed interest, and is part of that "conduct your affairs in a businesslike manner" concept. So for a $50,000 loan, the IRS will want to see that you are reporting at least $201.66 of interest for the first month, with the remaining month's interest depending on that month's AFR and the remaining balance of the loan (assuming the balance is being paid off.)
Of course, this is on the honor system, and only about 1% of taxpayers are audited.
